School districts adding up cost of new health tax

B.C.’s 60 school districts are updating their budgets for next year, when they will have to pay employee Medical Services Plan premiums and a new health tax on payrolls coming in to replace it.

In the legislature Tuesday, opposition critics jumped on reports from districts that the 2019 costs of double taxation are going to result in extra millions in costs before MSP is phased out in 2020.

Richmond-Steveston MLA John Yap said his local school district has to cover more than $2 million next year, and pressed Education Minister Rob Fleming on whether there would be any relief for them.

“The new employer tax that the government is downloading on school boards was not anticipated,” Yap said. “Richmond school board is facing $2.2 million in cuts to the classroom. Again to the minister, is there money in the budget for school boards to pay the new employer tax?”

Fleming emphasized the savings school districts get from the 50-per-cent reduction in MSP premiums that took effect on Jan. 1. He then recited a list of new education investments, from seismic upgrades to the 3,700 teachers hired to meet the terms of a Supreme Court of Canada ruling last year.

At one point, Speaker Darryl Plecas was moved to remind Fleming that “shorter answers are good” in question period.

B.C. Liberal education critic Dan Davies said the cost for Vancouver would be more than $7 million next year.

Finance Minister Carole James has indicated that the impact of the payroll tax on municipalities and school districts is still up for discussion before it takes effect next year.

The tax is on all employers, including non-profits and local governments, with payroll costs in excess of $500,000. The highest rate is 1.95 per cent of the payroll, for businesses and organizations with a payroll of $1.5 million or higher.